iGate revenues rise 10 per cent in Q1

BANGALORE: Technology services company iGate posted first quarter earnings that beat analyst expectations, aided by client additions and an improving macroeconomic environment in the United States.

The New Jersey-based company, which has most of its 30,000 employees based in Bangalore, said its revenue during the three months up to March jumped 10 per cent to $302.2 million compared with the same period last year. Analysts had expected a 9.4 per cent rise.

"Overall market conditions appear to be favorable across the board," said Ashok Vemuri, CEO and managing director of iGate, in a statement. Net income during the March quarter fell 9 per cent to $31.6 million compared with the corresponding quarter last year.

Analysts had expected a 10 per cent to 19 per cent fall in iGate’s net income. On a quarterly basis, the company’s sales grew 1 per cent. Vemuri, a former board member at Infosys, attributed the fall in net income to visa costs and wage increases during the quarter.

"As we continue to see a ramp up in our business in the US, that is a cost that we had to bear. Next quarter also we will have a (visa) cost, which we are yet to quantify."

iGate’s better-than-expected sales growth comes at a time when large markets such as the US and Europe are showing signs of growth after nearly two years of weakness.